You may recall that about a year ago, Trent Reznor jokingly mentioned that 400 gigs of high definition video footage of some shows from Nine Inch Nail's previous tour had been released online "by a mysterious, shadowy group of subversives." Not only that, he noted "I'll bet some enterprising fans could assemble something pretty cool." Now, of course it was Rezor's own people who were "leaking" the content, but we'd been hearing all sorts of cool things about what they were doing, and on Christmas Eve they officially released what they had put together called "Another Version Of The Truth: The Gift." It's an amazing display of crowdsourced teamwork by a group calling itself "This One Is On Us," a play on Reznor's statement when he released "The Slip" as a completely free download, when he said "This one's on me."
As they note, it took 12 months, involving a "core team of dozens (with a network of thousands), spanning 3 continents, 4 languages, 5 specialist teams [and] countless sleepless nights." And what did they come out with? Well, it's a concert video that's available in pretty much any format you might want (and they're still adding more). In fact you'll soon be able to get it in Blu-ray. But in the meantime, you can get it in standard DVD of dual layer DVD formats. You can get it for the PS3 or as a basic .MOV file. There's a version catering to those who want to watch on an iPod, and (of course) it's on YouTube.
And as we're being told how awful BitTorrent is and how various torrent trackers and search engines need to be shut down, the folks behind this effort released it under a Creative Commons license, and people are being told that they "are encouraged to seed for as long as possible." As for Reznor himself? He notes that he's "blown away" and reminded (yet again) that Nine Inch Nails fans "kick ass."
But Bittorrent can't be used for any legitimate purpose, right? And musicians can't possibly embrace what the technology allows? Once again, we're seeing why those who embrace what technology allows will do just fine moving forward. It's only those who think that the answer is to bring out the lawyers and try to hold back progress who will find themselves struggling to create business models that work.
We've certainly talked a lot about the various ways that Trent Reznor has been exploring creative new business models that center around connecting with fans and giving them a reason to buy, but he's now using the same concepts to try to help save a life. On Wednesday, he announced a program to get people to donate money to help Eric De La Cruz get a heart transplant, whereby people who donate certain amounts to the cause will get to hang out/meet with Reznor and other band members during his ongoing tour involving both Nine Inch Nails and Jane's Addiction (which, by the way, hits Silicon Valley tonight, for those in the area -- though, they're not accepting any more donations for people going to tonight's show). As with the Ghosts I-IV model, there are different "tiers" of support available. In just two days, he's been able to raise nearly half a million dollars, once again showing the power of having a strong community and trying to do something good with it. It will be fascinating to see if there's more that can be done along these lines in the future as well -- turning some of these business models into helping out those in need.
We've covered plenty of examples of Apple's rather arbitrary decision/approval process for putting apps in the iPhone App Store -- demonstrating a huge opportunity for other phone providers to be more open and less ridiculous. We've also talked plenty about Trent Reznor and how Nine Inch Nails is doing all sorts of unique things to connect with fans -- including a fantastically well thought out iPhone app that got lots of well-deserved attention.
We've reviewed nin: access and determined that we cannot post this version of your iPhone application to the App Store at this time because it contains objectionable content which is in violation of Section 3.3.12 from the iPhone SDK Agreement which states:
"Applications must not contain any obscene, pornographic, offensive or defamatory content or materials of any kind (text, graphics, images, photographs, etc.), or other content or materials that in Apple's reasonable judgement may be found objectionable by iPhone or iPod touch users."
The objectionable content referenced in this email is "The Downward Spiral". Since the app is live on the App store, please make the necessary changes to the application as soon as possible, and resubmit your binary to iTunes Connect. Thank you
Except... it's not at all clear what the actual problem is. As Reznor notes, the album "The Downward Spiral" (one of NIN's most popular albums) is not available on the app itself, though the song "The Downward Spiral" is apparently found somewhere in a podcast that can be streamed from the app. But, as Reznor later points out, the same song can be easily bought on iTunes, so it's difficult to see what possible objection Apple could have.
I'll voice the same issue I had with Wal-Mart years ago, which is a matter of consistency and hypocrisy. Wal-Mart went on a rampage years ago insisting all music they carry be censored of all profanity and "clean" versions be made for them to carry. Bands (including Nirvana) tripped over themselves editing out words, changing album art, etc to meet Wal-Mart's standards of decency - because Wal-Mart sells a lot of records. NIN refused, and you'll notice a pretty empty NIN section at any Wal-Mart. My reasoning was this: I can understand if you want the moral posturing of not having any "indecent" material for sale - but you could literally turn around 180 degrees from where the NIN record would be and purchase the film "Scarface" completely uncensored, or buy a copy of Grand Theft Auto where you can be rewarded for beating up prostitutes. How does that make sense?
You can buy The Downward Fucking Spiral on iTunes, but you can't allow an iPhone app that may have a song with a bad word somewhere in it. Geez, what if someone in the forum in our app says FUCK or CUNT? I suppose that also falls into indecent material. Hey Apple, I just got some SPAM about fucking hot asian teens THROUGH YOUR MAIL PROGRAM. I just saw two guys having explicit anal sex right there in Safari! On my iPhone!
Come on Apple, think your policies through and for fuck's sake get your app approval scenario together.
While my keynote presentation today at the Mesh Conference does mention Trent Reznor, luckily (for me) it's not the same presentation I did at MidemNet... because, if it was, I'd have to do a last minute update on the presentation to take into account the new iPhone app that Reznor is releasing, which basically takes all of the features from the NIN website, and enables it on the iPhone... and then adds in a neat bit of location-based info so fans can find each other, or know where other fans happen to be. And, oh yeah, despite all the fuss about charging for iPhone apps, he's releasing it for free -- realizing that better enabling fans to connect will only help him further monetize other things later. The overall article is a great read as well, digging deeper into Reznor's experiments, business model and thoughts on the process:
"I've said it before and I'll say it again: I don't think music should be free. But the climate is such that it's impossible for me to change that, because the record labels have established a sense of mistrust. So everything we've tried to do has been from the point of view of, 'What would I want if I were a fan? How would I want to be treated?' Now let's work back from that. Let's find a way for that to make sense and monetize it."
He's making the same point we've been making. It's no longer about whether or not music "should" be free. That doesn't matter any more. For most people it is free. So once you accept that, you start looking for ways to do more with it -- and Reznor is doing much more with it than just about anyone else.
As most folks know, Metallica was an early "skeptic" of online music, with drummer Lars Ulrich leading the way -- suing Napster and complaining about iTunes. In many ways the band, and Ulrich specifically, became the face of the big anti-fan, anti-internet rockstar. More recently, the band has tried to change that image, working hard to embrace the internet a bit more, and even shrugging off the fact that the band's new album was leaked online. However, those early actions really hurt the band's reputation, leading many fans to boycott the band and refuse to buy any of its new music.
"We're doing a bunch of shows with Trent this summer in Europe. I look forward to sitting down and talking to him about what's on his radar."
That's certainly quite a shift, considering that Reznor has pretty fully embraced online distribution, including file sharing and things like BitTorrent. So, now we just have to see if Ulrich actually learns some of those lessons.
Trent Reznor sure has a way of releasing new experiments just before I'm about to give a presentation about him. He did it right before my MidemNet case study about his experiments, and now that I'm getting ready to an updated (and expanded!) version of the presentation at next week's Leadership Music Digital Summit, Reznor has launched a new website called NIN|JA 2009 in support of the new tour Nine Inch Nails is doing with Jane's Addiction (and Street Sweeper). The site has a streaming playlist from all three bands, along with the ability to download an entirely free EP of unreleased tracks (two from each band) in exchange for your email. And, not surprisingly, the page lets you get more info on the tour.
It's not particularly different than the release of The Slip, but shows that he's continued to combine these two factors of connecting with fans (often via free music) and immediately giving them a real reason to buy. Oh yeah -- and he still did it in a fun way for the fans. Last night, on Twitter, he alerted people that the site would be going live today, but then had fun with it this morning -- giving people a 3 minute countdown following by a bit of joking around, first backing it up to 5 minutes, saying someone had kicked the plug out of the wall, then geekily pretending to be a clueless Windows user:
trent_reznor: So... anybody know what it means when your PC's screen goes all blue and wont do anything? Give me a sec here.
trent_reznor: An exception has occured at 0028:C11B3ADC in VxD DiskTSD(03) 000016660. It may be possible to continue normally. ????
trent_reznor: Come on, people - you know me better than that.
And with that, the site launched. Time to go update the presentation...
Embedded here is the 15 minute (trust me, it goes by quickly) presentation I did at MidemNet on January 17th in Cannes, France. If you're reading via RSS or another site like iGoogle, click through to see the full presentation. Sorry it took so long to get the video up. There were a few minor technical difficulties. Anyway, the presentation garnered an interesting reaction and a whole series of fascinating discussions over email, in person and over the phone since I presented it, and while I don't want to repeat what's in the video, I did want to discuss a few points raised by the presentation. The core of the presentation is the following simple "formula" that is the basis for making money in the music business (and, I'd argue, many other businesses) in the digital era:
Connect With Fans (CwF) + Reason To Buy (RtB) = The Business Model ($$$$)
There are many artists -- famous and not so famous -- who have been making use (on purpose, or not) of this formula to create successful strategies for building up a stronger fan base, creating wonderful new works of art, distributing them out to the community and getting paid for it at the same time. What made Reznor so interesting as a case study was the fact that he's done it so many times in so many different ways that he, by himself, represents a great example of how you can approach this simple formula in an infinite variety of creative ways.
One of the issues I've had in discussing recording industry business models is that we always hear excuses for why a, b or c won't work. "Well, that guy can make money selling t-shirts, but this guy's fans aren't t-shirt types." "That guy will sell concert tickets, but this guy doesn't like to perform." "Maybe some fans will pay upfront, but people are so greedy that most will just free-ride." It's all excuses. They all want a simple model that everyone can follow, but the point here is that while the model itself is simple, executing on any business model is difficult.
It's about applying that "simple model" in a variety of different creative ways -- which Reznor has done time and time and time again. Hell, I couldn't even include all of the examples of Reznor's successes in this single presentation, let alone successes by other musicians who have executed differently -- but all of whom connected with fans (CwF) and then gave them a real reason to buy (RtB).
A second point that needs to be discussed is that a true reason to buy (RtB) is a voluntary transaction. Too often we've seen musicians or other content creators think that there is some sort of obligation to buy. And, so they put something out with a price tag, but without doing a very good job convincing fans why they should buy. There was no real reason -- and then they seem to lash out at their fans for hurting them. The fault, however, lies with the musician (like any business) who failed to give a proper reason to buy, and falsely assumed that fans had some sort of obligation to buy. If an artist believes there's an obligation to buy, fans will often educate the artist very quickly.
One final point on this is the last question that people often raise: why should the musician be involved in any of this? Shouldn't they just be creating music. There are two answers to this. First, this is exactly where a smart record label, agent or manager can come in and be quite helpful. Let the musician create the music and let the "business guys" focus on applying this business model. Second, however, is that due to the way the industry is these days, the musician does need to be somewhat involved. You cannot connect with fans if you're in seclusion. If you don't want to make the effort to connect with fans, then that's fine: you won't have that many fans. It's a choice you make.
That said, there are tremendous opportunities allowed by new technologies, new communities and new methods of communicating today. They all enable better ways to connect with fans, and better ways to offer real reasons to buy. Those who look at the past and complain about what's been lost need to turn around and look at the vast open fields of opportunity in front of them. There's a lot more music to be made, a ton of new fans to make very, very happy -- and, yes, through it all, an awful lot of money that can be made as well. You just need to stop worrying about what was lost and recognize all there is to be gained.
Trent Reznor is making it awfully difficult for me to finish the presentation I'm giving about him next week at MidemNet, because he keeps on doing stuff that should be mentioned in that presentation (I may have to ask the MidemNet folks for more time!). The latest is a post on the NIN.com site (which, annoyingly, doesn't have permalinks for his posts -- though others repost it in the forums on the site) saying:
The internet is full of surprises these days.
I was contacted by a mysterious, shadowy group of subversives who SOMEHOW managed to film a substantial amount (over 400 GB!) of raw, unedited HD footage from three separate complete shows of our Lights in the Sky tour. Security must have been lacking at these shows because the quality of the footage is excellent.
If any of you could find a LINK to that footage I'll bet some enterprising fans could assemble something pretty cool.
Oh yeah, you didn't hear this from me.
posted by trent reznor at 12:56pm
It's stuff like this that makes fans love Reznor that much more. While bands like Radiohead tried to get people to pay just to remix their songs, Reznor makes it fun to be a fan. As the link above to the forum notes, the content is now available via BitTorrent, and everyone at NIN headquarters is looking forward to what comes out of it -- though, they point out that with so much high def video, it's really mainly targeted at expert users first, and amateurs are probably better off waiting a bit until other copies are made available in easier to handle formats.
Funny to see this in contrast to how Warner Music and the other record labels are dealing with online videos, where they demand money for every usage, pissing off the very musicians they're supposed to represent. Once again, Reznor is leading the way. I'm just hoping he takes a little time off so that I can get this presentation done and not have it be out of date on the day of the presentation.
As some of you may know, in a week and a half I'm giving a presentation at the music industry MidemNet conference, focusing on how Trent Reznor's various business model experiments highlight the future of the music industry. I'll be putting the final touches on my presentation this week, and it's great to find one additional data point: the top selling MP3 download on Amazon last year was Nine Inch Nails' Ghosts I-IV album, which you probably know Reznor put under a pretty open Creative Commons license (and even gave away a bunch of the tracks himself). In other words, you could go on pretty much any file sharing system out there and legally download the music for personal use... and yet it was still the top selling downloadable album (this is on top of all the money earned by Reznor's other business models associated with this album). Certainly puts a nice little cherry on top of the theme of my presentation.
One of the things to understand when we talk about various business model innovations that companies can use, is the idea that successful implementation of these business models doesn't mean merely copying what someone else did, but continuing to come up with new ideas and new innovations. One of the common retorts to this, often found in our comments, is that if everyone's doing x then it loses all value. But, of course, that shows a fundamental misunderstanding of what we're advocating. The whole point is that everyone doesn't do x, but they keep innovating and doing different things. And, for those who claim that there really are only so many things you can do, I'll point you to the words of economist Paul Romer:
Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. The difficulty is the same one we have with compounding: possibilities do not merely add up; they multiply.
Or, even better, I'll just point you to the example of Trent Reznor, who, despite being quite far ahead of the pack on many attempted business models, doesn't seem to want to rest on his laurels. Instead, he just keeps innovating. We've covered many of the business model innovations made by Trent Reznor over the last few years (and I'm actually preparing a presentation on the topic for a music industry conference next year -- which I'll be talking about more in the future). His latest is to embrace the iPhone game Tapulous, which is sort of a rather simplified iPhone version of any "push a button to the beat" music game, a la Guitar Hero or Rock Band today (or Dance Dance Revolution in the past).
Now, the easy (boring) thing to do would have been to just create a Nine Inch Nails version of the game, which is now available. You can now play Tapulous to various songs from NiN's recent albums (whose releases we've discussed previously). However, much more interesting is tying the game even further to the band, such that those who score a certain level of points can submit the score back to Tapulous, and get entered into a contest to win floor tickets to see NiN perform or, for one lucky winner, a Les Paul guitar signed by Trent Reznor.
Despite the fact that many would say that Reznor has done much more innovating than many other musicians these days, the important thing to note is that he keeps on trying new stuff -- and each time gets more attention and wins over more fans with his actions. And the folks who complain that no new business model will work because everyone will be doing it? They're not getting much attention at all.